Market Newsdesk

Emerson Reports Third Quarter 2021 Results; Raises 2021 Outlook

• Net Sales were $4.7 billion up 20 percent from the year prior; Underlying Sales were up 15 percent
• GAAP EPS was $1.04, up 55 percent from the year prior; Adjusted EPS, which excludes restructuring and first year purchase accounting charges, was $1.09, up 36 percent
• Operating Cash Flow was $1.1 billion, up 31 percent; Free Cash Flow (FCF) was $977 million, up 32 percent, resulting in FCF conversion of 154 percent
• Restructuring and related actions of $32 million were initiated in the quarter, continuing execution of the comprehensive cost reset program to return the company to record adjusted EBIT margins
• Declared regular quarterly cash dividend of $0.505 per share of common stock payable September 10, 2021 to stockholders of record August 13, 2021
• Published new Environmental, Social, and Governance (ESG) Report in June, introducing goal of doubling representation of women globally and U.S. minorities at the leadership level by 2030

ST. LOUIS–(BUSINESS WIRE)–
Emerson (NYSE: EMR) today reported results for the third fiscal quarter ended June 30, 2021.

“We are pleased with our results this quarter, as accelerating sales growth in key end markets combined with strong execution by operations helped us deliver exceptional financial results,” said Emerson President and Chief Executive Officer Lal Karsanbhai. “In particular, we saw ongoing strength in our residential businesses and rapid improvement in both commercial and industrial end markets. Importantly, our core North American process automation markets turned sharply back to growth, complementing the ongoing strength in discrete and hybrid markets. These results contributed to solid margin improvement as we fully leveraged the benefits of our broad ongoing cost reset plan. Cash flow performance was strong as a result of earnings growth and effective working capital management. This gives us optionality with regard to capital allocation in 2022 and beyond.”

“Despite a challenging operating environment – material costs, availability, logistics, and labor constraints all required diligent management – I am extremely proud of our operations team, which has worked tirelessly to limit the impact of these issues as the world reopens and demand rebounds across our customer base. The hard work of our global teams – combined with our reset cost structure and improving demand in longer-cycle markets – is allowing us to improve our outlook for the year. It has also facilitated acceleration of investment in key technologies that are expected to drive further differentiation and increased relevance with our customers.”

“We are energized by our financial performance and operational management, and by the momentum around modernization of the Emerson culture,” Karsanbhai continued. “In our most recent ESG report, we announced a goal to double the number of women globally and U.S. minorities at the leadership level by 2030. We are modernizing work practices and are actively refreshing our management process to continue advancing ESG transparency and reporting. In the long run, I firmly believe these cultural efforts will be important and tangible business enablers.”

June Trailing Three-Month Underlying Orders were up 26 percent, as strength in residential, cold chain, professional tools, hybrid and discrete automation markets was bolstered by recovery in later cycle process automation markets.

Third quarter Net Sales were up 20 percent and Underlying Sales were up 15 percent, excluding favorable currency of 4 percent and an impact of 1 percent from acquisitions. Revenue for the quarter came in ahead of expectations driven by strength across commercial and residential markets, as well as a sharp recovery in core North American process automation markets. By geography, the Americas grew 18 percent, Europe grew 13 percent, and Asia, Middle East & Africa grew 11 percent. China grew 7 percent.

Third quarter Gross Profit Margin of 42.2 percent was up 90 basis points from the previous year primarily due to cost reductions and leverage across the enterprise. Pretax Margin of 16.7 percent was up 500 basis points while EBIT Margin of 17.5 percent was up 460 basis points, as ongoing cost reduction actions and leverage more than offset price cost headwinds. Adjusted EBIT Margin, which excludes restructuring and first year purchase accounting charges, was 18.4 percent, up 310 basis points.

Earnings Per Share were $1.04 for the quarter, up 55 percent, and Adjusted Earnings Per Share, which excludes restructuring and first year purchase accounting charges, were $1.09, up 36 percent. Earnings in the quarter were ahead of management expectations, benefiting from higher volume and ongoing cost reduction actions.

Operating Cash Flow was $1.1 billion for the quarter, up 31 percent, and $2.7 billion year-to-date, up 47 percent. Free Cash Flow was $977 million, up 32 percent, and $2.4 billion year-to-date, up 55 percent. Cash flow results reflected higher earnings due to volume, operational execution across the two business platforms and favorable trade working capital.

Business Platform Results

Automation Solutions June trailing three-month underlying orders were up 17 percent. By geography, the Americas showed the most improvement, up 29 percent. Europe was up 8 percent. Asia, Middle East & Africa grew 8 percent, with China orders increasing sharply by 23 percent. Backlog increased $200 million compared to the prior quarter to $5.5 billion, and was up 17 percent year-to-date.

Net sales increased 14 percent in the quarter, with underlying sales up 8 percent. Results reflected ongoing strength across discrete and hybrid markets, and sharp improvement in longer cycle core process automation markets. Importantly, the Americas underlying sales recovered sharply, growing by 9 percent, driven by continued momentum in life sciences, food & beverage, and medical markets paired with growth trends across process automation and sustainability related business. As expected, KOB3/MRO and KOB2/modernization business led the recovery, however some KOB1 project activity began to materialize, particularly in chemical, biofuels, and power markets. Europe underlying sales were up 6 percent, driven by life sciences and biofuels demand. Asia, Middle East & Africa underlying sales grew 7 percent while China grew by 5 percent.

Segment EBIT margin increased 570 basis points to 17.7 percent, as savings from cost actions paired with strong volume leverage. Adjusted segment EBIT margin, which excludes restructuring and related costs, increased 320 basis points to 18.3 percent. Total restructuring and related actions in the quarter totaled $18 million.

Commercial & Residential Solutions June trailing three-month underlying orders were up 43 percent. The Americas grew by 43 percent, while Europe was up 64 percent. Asia, Middle East & Africa orders increased by 30 percent, with China up 11 percent. Backlog ended the quarter at $1.1 billion.

Net sales increased 32 percent and underlying sales were up 29 percent, with all businesses and geographies showing strong double-digit underlying growth. Underlying sales in the Americas were up 29 percent, reflecting ongoing strength in residential markets, bolstered by cold chain and professional tools momentum. Europe was up 37 percent as heat pump demand remained robust and demand for professional tools surged. Asia, Middle East & Africa was up 25 percent driven by cold chain and heating technologies. China grew by 15 percent.

Segment EBIT margin increased 220 basis points to 21.3 percent as leverage and cost reduction actions were somewhat offset by price-cost headwinds. Adjusted segment EBIT margin, which excludes restructuring and related costs, increased 170 basis points to 21.7 percent. Total restructuring and related actions in the quarter totaled $7 million.

2021 Updated Outlook

Despite ongoing pandemic challenges with the COVID delta variant, we expect overall continued improvement in industrial and commercial demand over the remainder of 2021. We also expect the operational, supply chain, and materials inflation environment to remain challenging through the remainder of the fiscal year.

The following table summarizes the updated 2021 guidance framework:

2021 Guidance
Net Sales Growth	9% – 10%	Operating Cash Flow	$3.6B
Automation Solutions	5% – 6%	Capital Spend	$600M
Commercial & Residential Solutions	17% – 18%	Free Cash Flow	$3.0B
		Dividend	$1.2B
Underlying Sales Growth	5% – 6%	Share Repurchase	$500M
Automation Solutions	flat – 1%
Commercial & Residential Solutions	15% – 16%	Tax Rate	22%
		Restructuring Actions	$200M
Pretax Margin	16%
Adjusted EBIT	18%
Adjusted EBITDA	23%
GAAP EPS	$3.79 +/- $.01
Adjusted EPS	$4.07 +/- $.01

Note 1: All figures are approximate

Upcoming Investor Events

Today, beginning at 8:30 a.m. Central Time / 9:30 a.m. Eastern Time, Emerson management will discuss the third quarter results during an investor conference call. Participants can access a live webcast available at www.emerson.com/financial at the time of the call. A replay of the call will be available for 90 days. Conference call slides will be posted in advance of the call on the company website.

Forward-Looking and Cautionary Statements

Statements in this press release that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impact of the COVID-19 pandemic as well as economic and currency conditions, market demand, including related to the pandemic and oil and gas price declines and volatility, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, among others, as set forth in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the SEC.

Table 1
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
	Quarter Ended June 30					Percent
	2020		2021			Change
Net sales	$3,914		$4,697			20	%
Costs and expenses:
Cost of sales	2,296		2,715
SG&A expenses	934		1,073
Other deductions, net	181		88
Interest expense, net	45		37
Earnings before income taxes	458		784			71	%
Income taxes	51		151
Net earnings	407		633
Less: Noncontrolling interests in earnings of subsidiaries	8		6
Net earnings common stockholders	$399		$627			57	%
Diluted avg. shares outstanding	600.0		602.1
Diluted earnings per share common share	$0.67		$1.04			55	%
	Quarter Ended June 30
	2020		2021
Other deductions, net
Amortization of intangibles	$60		$71
Restructuring costs	88		28
Other	33		(11	)
Total	$181		$88

Table 2
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
	Nine Months Ended June 30						Percent
	2020			2021			Change
Net sales	$12,227			$13,289			9	%
Costs and expenses:
Cost of sales	7,100			7,722
SG&A expenses	3,040			3,125
Other deductions, net	401			243
Interest expense, net	116			115
Earnings before income taxes	1,570			2,084			33	%
Income taxes	310			431
Net earnings	1,260			1,653
Less: Noncontrolling interests in earnings of subsidiaries	18			20
Net earnings common stockholders	$1,242			$1,633			31	%
Diluted avg. shares outstanding	608.4			602.3
Diluted earnings per share common share	$2.04			$2.71			33	%
	Nine Months Ended June 30
	2020			2021
Other deductions, net
Amortization of intangibles	$178			$223
Restructuring costs	216			111
Special advisory fees	13			—
Other	(6	)		(91	)
Total	$401			$243

Table 3
EMERSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, UNAUDITED)
	Quarter Ended June 30
	2020		2021
Assets
Cash and equivalents	$3,315		$2,860
Receivables, net	2,802		2,754
Inventories	1,928		2,114
Other current assets	761		1,038
Total current assets	8,806		8,766
Property, plant & equipment, net	3,688		3,664
Goodwill	6,734		7,777
Other intangible assets	2,468		2,993
Other	1,186		1,284
Total assets	$22,882		$24,484
Liabilities and equity
Short-term borrowings and current
maturities of long-term debt	$1,160		$1,478
Accounts payable	1,715		1,966
Accrued expenses	2,910		3,226
Total current liabilities	5,785		6,670
Long-term debt	6,326		5,835
Other liabilities	2,324		2,640
Total equity	8,447		9,339
Total liabilities and equity	$22,882		$24,484

Table 4
EMERSON AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS, UNAUDITED)
	Nine Months Ended June 30
	2020			2021
Operating activities
Net earnings	$1,260			$1,653
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	631			720
Stock compensation	69			191
Pension expense	50			23
Changes in operating working capital	(86	)		246
Other, net	(70	)		(113	)
Cash provided by operating activities	1,854			2,720
Investing activities
Capital expenditures	(329	)		(350	)
Purchases of businesses, net of cash and equivalents acquired	(114	)		(1,611	)
Other, net	(65	)		53
Cash used in investing activities	(508	)		(1,908	)
Financing activities
Net increase in short-term borrowings	269			31
Proceeds from short-term borrowings greater than three months	546			71
Payments of short-term borrowings greater than three months	(340	)		—
Proceeds from long-term debt	1,488			—
Payments of long-term debt	(502	)		(305	)
Dividends paid	(910	)		(909	)
Purchases of common stock	(942	)		(268	)
Other, net	28			89
Cash used in financing activities	(363	)		(1,291	)
Effect of exchange rate changes on cash and equivalents	(27	)		24
Increase (Decrease) in cash and equivalents	956			(455	)
Beginning cash and equivalents	1,494			3,315
Ending cash and equivalents	$2,450			$2,860

Table 5
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS, UNAUDITED)
	Quarter Ended June 30
	2020			2021
Sales
Measurement & Analytical Instrumentation	$709			$781
Valves, Actuators & Regulators	842			880
Industrial Solutions	469			593
Systems & Software	569			693
Automation Solutions	2,589			2,947
Climate Technologies	970			1,268
Tools & Home Products	357			489
Commercial & Residential Solutions	1,327			1,757
Eliminations	(2	)		(7	)
Net sales	$3,914			$4,697
Earnings
Automation Solutions	$311			$521
Climate Technologies	195			274
Tools & Home Products	58			101
Commercial & Residential Solutions	253			375
Stock compensation	(51	)		(66	)
Unallocated pension and postretirement costs	12			24
Corporate and other	(22	)		(33	)
Interest expense, net	(45	)		(37	)
Earnings before income taxes	$458			$784
Restructuring costs
Automation Solutions	$76			$18
Climate Technologies	5			4
Tools & Home Products	4			2
Commercial & Residential Solutions	9			6
Corporate	3			4
Total	$88			$28
The table above does not include $6 and $4 of costs related to restructuring actions that were reported in cost of sales and selling, general and administrative expenses for the three months ended June 30, 2020 and 2021, respectively.
Depreciation and Amortization
Automation Solutions	$137			$152
Climate Technologies	44			48
Tools & Home Products	20			20
Commercial & Residential Solutions	64			68
Corporate and other	8			17
Total	$209			$237

Table 6
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS, UNAUDITED)
	Nine Months Ended June 30
	2020			2021
Sales
Measurement & Analytical Instrumentation	$2,280			$2,211
Valves, Actuators & Regulators	2,609			2,522
Industrial Solutions	1,470			1,656
Systems & Software	1,791			2,043
Automation Solutions	8,150			8,432
Climate Technologies	2,869			3,459
Tools & Home Products	1,219			1,419
Commercial & Residential Solutions	4,088			4,878
Eliminations	(11	)		(21	)
Net sales	$12,227			$13,289
Earnings
Automation Solutions	$1,012			$1,353
Climate Technologies	563			731
Tools & Home Products	233			311
Commercial & Residential Solutions	796			1,042
Stock compensation	(69	)		(191	)
Unallocated pension and postretirement costs	37			71
Corporate and other	(90	)		(76	)
Interest expense, net	(116	)		(115	)
Earnings before income taxes	$1,570			$2,084
Restructuring costs
Automation Solutions	$182			$94
Climate Technologies	14			8
Tools & Home Products	12			4
Commercial & Residential Solutions	26			12
Corporate	8			5
Total	$216			$111
The table above does not include $15 and $11 of costs related to restructuring actions that were reported in cost of sales and selling, general and administrative expenses for the six months ended June 30, 2020 and 2021, respectively.
Depreciation and Amortization	$414			$464
Automation Solutions
Climate Technologies	133			144
Tools & Home Products	58			59
Commercial & Residential Solutions	191			203
Corporate and other	26			53
Total	$631			$720

Reconciliations of Non-GAAP Financial Measures & Other												Table 7
Reconciliations of Non-GAAP measures (denoted by *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts):
Q3 2021 Underlying Sales Change	Auto Solns				Comm & Res Solns				Emerson
Reported (GAAP)		14	%			32	%		20	%
(Favorable) / Unfavorable FX		(4	)%			(3	)%		(4	)%
Acquisitions / Divestitures		(2	)%			—	%		(1	)%
Underlying*		8	%			29	%		15	%
FY 2021E Underlying Sales Change	Auto Solns				Comm & Res Solns				Emerson
Reported (GAAP)	5% – 6		%		17% – 18		%		9% – 10	%
(Favorable) / Unfavorable FX		(3	)%			(2	)%		(3	)%
Acquisitions / Divestitures		(2	)%			–	%		(1	)%
Underlying*	flat – 1		%		15% – 16		%		5% – 6	%
Q3 Earnings Per Share	Q3 FY20				Q3 FY21				Change
Earnings per share (GAAP)	$	0.67			$	1.04			55	%
Restructuring		0.13				0.04			(20	)%
OSI purchase accounting items		—				0.01			1	%
Adjusted earnings per share*	$	0.80			$	1.09			36	%
Earnings Per Share	FY2021E
Earnings per share (GAAP)	$3.78 – $3.80
Restructuring		0.24
OSI purchase accounting items & fees		0.07
Equity investment gain		(0.03	)
Adjusted earnings per share*	$4.06 – $4.08
EBIT and EBITDA Margin	Q3 FY20				Q3 FY21				Change			FY21E
Pretax margin (GAAP)		11.7	%			16.7	%		500 bps			16	%
Interest expense, net		1.2	%			0.8	%		(40) bps			1	%
Earnings before interest and taxes margin*		12.9	%			17.5	%		460 bps			17	%
Restructuring		2.4	%			0.7	%		(170) bps			1	%
OSI purchase accounting items		–	%			0.2	%		20 bps			–	%
Equity investment gain		–	%			–	%		– bps			–	%
Adjusted earnings before interest and taxes margin*		15.3	%			18.4	%		310 bps			18	%
Depreciation and amortization expense												5	%
Adjusted earnings before interest, taxes, depreciation and amortization margin*												23	%
Automation Solutions Segment EBIT Margin	Q3 FY20				Q3 FY21				Change
Automation Solutions Segment EBIT margin (GAAP)		12.0	%			17.7	%		570 bps
Restructuring and related charges impact		3.1	%			0.6	%		(250) bps
Automation Solutions Adjusted Segment EBIT margin*		15.1	%			18.3	%		320 bps
Commercial & Residential EBIT Margin	Q3 FY20				Q3 FY21				Change
Commercial & Residential EBIT margin (GAAP)		19.1	%			21.3	%		220 bps
Restructuring and related charges impact		0.9	%			0.4	%		(50) bps
Commercial & Residential Adjusted EBIT margin*		20.0	%			21.7	%		170 bps
Q3 Cash Flow	Q3 FY20				Q3 FY21				Change
Operating cash flow (GAAP)	$	842			$	1,105			31	%
Capital expenditures		(104	)			(128	)		1	%
Free cash flow*	$	738			$	977			32	%
YTD Cash Flow	Q3 YTD FY20				Q3 YTD FY21				% Change
Operating cash flow (GAAP)	$	1,854			$	2,720			47	%
Capital expenditures		(329	)			(350	)		8	%
Free cash flow*	$	1,525			$	2,370			55	%
FY 2021E Cash Flow	FY 2021E
Operating cash flow (GAAP)	$3.6B
Capital expenditures		(600	)
Free cash flow*	$3.0B
Cash Flow to Net Earnings Conversion	Q3 FY21
Operating cash flow to net earnings (GAAP)		174	%
Capital expenditures		(20	)%
Free cash flow to net earnings*		154	%
Note 1: Underlying sales and orders exclude the impact of acquisitions, divestitures and currency translation.
Note 2: All fiscal year 2021E figures are approximate, except where range is given.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005512/en/

Emerson

Investor Contact: Colleen Mettler (314) 553-2197

Media Contact: Casey Murphy (314) 982-6220

KEYWORDS: United States North America Missouri

INDUSTRY KEYWORDS: Electronic Design Automation Engineering Technology Oil/Gas Manufacturing Energy Software

MEDIA:

Logo

The GEO Group Reports Second Quarter 2021 Results and Increases Full Year 2021 Guidance

BOCA RATON, Fla.–(BUSINESS WIRE)–The GEO Group, Inc. (NYSE: GEO) (“GEO”), a fully integrated equity real estate investment trust (“REIT”) and a leading provider of enhanced in-custody rehabilitation, post-release support, and community-based programs, reported today its financial results for the second quarter and the first six months of 2021 and increased its financial guidance for the full-year 2021.

Second Quarter 2021 Highlights

• Total revenues of $565.4 million
• Net Income Attributable to GEO of $42.0 million
• Adjusted Net Income of $50.8 million
• Normalized FFO of $0.58 per diluted share
• AFFO of $0.70 per diluted share

We reported second quarter 2021 net income attributable to GEO of $42.0 million compared to $36.7 million for the second quarter 2020. We reported total revenues for the second quarter 2021 of $565.4 million compared to $587.8 million for the second quarter 2020. Second quarter 2021 results reflect $7.5 million in one-time employee restructuring expenses, pre-tax, a $3.0 million loss on real estate assets, pre-tax, a $1.7 million gain on the extinguishment of debt, pre-tax, and $0.1 million in the tax effect of adjustments to net income attributable to GEO. Excluding these items, we reported second quarter 2021 Adjusted Net Income of $50.8 million compared to $43.1 million for the second quarter 2020.

We reported second quarter 2021 Normalized Funds From Operations (“Normalized FFO”) of $69.7 million, or $0.58 per diluted share, compared to $61.5 million, or $0.51 per diluted share, for the second quarter 2020. We reported second quarter 2021 Adjusted Funds From Operations (“AFFO”) of $84.4 million, or $0.70 per diluted share, compared to $78.8 million, or $0.66 per diluted share, for the second quarter 2020.

Our better-than-expected financial performance during the second quarter 2021 was driven by continued favorable cost trends; higher occupancies at our facilities for the U.S. Marshals Service and U.S. Immigration and Customs Enforcement; and increased revenue and earnings from our electronic monitoring segment.

George C. Zoley, Executive Chairman of GEO, said, “We are pleased with our strong second quarter results and our increased financial guidance for the full year. We believe our robust financial performance is representative of the strength of our diversified business segments. We recognize that there have been concerns regarding our future access to financing, and we believe that our continued focus on debt reduction, the ongoing review of potential asset sales, and the evaluation of our corporate tax structure are all prudent steps as we work towards addressing these concerns.”

First Six Months 2021 Highlights

• Total revenues of $1.14 billion
• Net Income Attributable to GEO of $92.5 million
• Adjusted Net Income of $84.9 million
• Normalized FFO of $1.02 per diluted share
• AFFO of $1.30 per diluted share

For the first six months of 2021, we reported net income attributable to GEO of $92.5 million compared to $61.9 million for the first six months of 2020. We reported total revenues for the first six months of 2021 of $1.14 billion compared to $1.19 billion for the first six months of 2020. Results for the first six months of 2021 reflect $7.5 million in one-time employee restructuring expenses, pre-tax, a $10.4 million gain on real estate assets, pre-tax, and a $4.7 million gain on the extinguishment of debt, pre-tax. Excluding these items, we reported Adjusted Net Income of $84.9 million for the first six months of 2021 compared to $72.0 million for the first six months of 2020.

For the first six months of 2021, we reported Normalized FFO of $122.7 million, or $1.02 per diluted share, compared to $108.7 million, or $0.91 per diluted share, for the first six months of 2020. For the first six months of 2021, we reported AFFO of $156.6 million, or $1.30 per diluted share, compared to $145.4 million, or $1.21 per diluted share, for the first six months of 2020.

Updated 2021 Financial Guidance

• FY21 Net Income Attributable to GEO of $167.5-$174.5 Million
• FY21 Adjusted EBITDAre of $441.5-$448.5 Million
• FY21 AFFO of $2.51-$2.57 per diluted share

We have increased our financial guidance for the full year 2021 and have issued our financial guidance for the third and fourth quarters of 2021. For the full year 2021, we expect Net Income Attributable to GEO to be in a range of $167.5 million to $174.5 million on annual revenues of approximately $2.23 billion. We expect full year 2021 Adjusted EBITDAre to be in a range of approximately $441.5 million to $448.5 million. We expect full year 2021 Adjusted Net Income per diluted share to be in a range of $1.34 to $1.40 and full year 2021 AFFO per diluted share to be in a range of $2.51 to $2.57.

For the third quarter 2021, we expect Net Income Attributable to GEO to be in a range of $39 million to $42 million on quarterly revenues of $548 million to $553 million. We expect third quarter 2021 AFFO to be in a range of $0.62 to $0.64 per diluted share. For the fourth quarter 2021, we expect Net Income Attributable to GEO to be in a range of $36 million to $40 million on quarterly revenues of $538 million to $543 million. We expect fourth quarter 2021 AFFO to be in a range of $0.59 to $0.63 per diluted share.

Our guidance reflects our previously announced expectation that our contracts with the Federal Bureau of Prisons at the Big Spring Correctional Facility and Flightline Correctional Facility in Texas will not be renewed when the current contract option periods expire on November 30, 2021.

Balance Sheet and Liquidity

At the end of the second quarter 2021, we had approximately $483 million in cash on hand, resulting from the previously announced drawdown of our Revolving Credit Facility. Our decision to draw on our Revolving Credit Facility was a conservative precautionary step to preserve liquidity, maintain financial flexibility, and obtain additional funds for general corporate purposes.

During the first six months of 2021, we reduced our net recourse debt by approximately $105 million, which represents substantial progress toward our previously articulated objective of reducing net recourse debt by $125 million to $150 million in 2021. Based on our progress to date and our better-than-expected earnings and cash flows, we have increased our target for net debt reductions in 2021 to no less than $150 million to $175 million.

During the first six months of 2021, we also completed the sale of three real estate assets in our Reentry Services, Community-Based segment, totaling approximately 700 beds. Additionally, on July 1, 2021, we completed the sale of certain non-real estate assets in our Youth services segment. On a combined basis, these sales generated net proceeds of approximately $27 million. We are evaluating the potential sale of additional company-owned assets.

COVID-19 Information

As the COVID-19 pandemic has impacted communities across the United States and around the world, our employees and facilities have also been impacted by the spread of COVID-19. Ensuring the health and safety of our employees and all those in our care has always been our number one priority.

During the pandemic, we have implemented mitigation initiatives to address the risks of COVID-19, consistent with the guidance issued for correctional and detention facilities by the Centers for Disease Control and Prevention (“CDC”). We will continue to evaluate and refine the steps we have taken as appropriate and necessary based on updated guidance by the CDC and best practices. We are grateful for our frontline employees who continue to make daily sacrifices to care for all those in our facilities. Information on the COVID-19 mitigation initiatives implemented by GEO can be found at www.geogroup.com/COVID19.

Conference Call Information

We have scheduled a conference call and simultaneous webcast for today at 11:00 AM (Eastern Time) to discuss our second quarter 2021 financial results as well as our outlook. The call-in number for the U.S. is 1-877-250-1553 and the international call-in number is 1-412-542-4145. In addition, a live audio webcast of the conference call may be accessed on the Webcasts section under the News, Events and Reports tab of GEO’s investor relations webpage at investors.geogroup.com. A replay of the webcast will be available on the website for one year. A telephonic replay of the conference call will be available until August 18, 2021 at 1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The participant passcode for the telephonic replay is 10159108.

About The GEO Group

The GEO Group (NYSE: GEO) is a fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO is a leading provider of enhanced in-custody rehabilitation, post-release support, electronic monitoring, and community-based programs. GEO’s worldwide operations include the ownership and/or management of 114 facilities totaling approximately 90,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 20,000 professionals.

Reconciliation Tables and Supplemental Information

GEO has made available Supplemental Information which contains reconciliation tables of Net Income Attributable to GEO to Net Operating Income, Net Income to EBITDAre (EBITDA for real estate) and Adjusted EBITDAre (Adjusted EBITDA for real estate), and Net Income Attributable to GEO to FFO, Normalized FFO and Adjusted FFO, along with supplemental financial and operational information on GEO’s business and other important operating metrics, and in this press release, Net Income Attributable to GEO to Adjusted Net Income. The reconciliation tables are also presented herein. Please see the section below titled “Note to Reconciliation Tables and Supplemental Disclosure – Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines these supplemental Non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures. GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental Information available on GEO’s investor webpage at investors.geogroup.com.

Note to Reconciliation Tables and Supplemental Disclosure –

Important Information on GEO’s Non-GAAP Financial Measures

Net Operating Income, EBITDAre, Adjusted EBITDAre, Funds from Operations, Normalized Funds from Operations, Adjusted Funds from Operations, and Adjusted Net Income are non-GAAP financial measures that are presented as supplemental disclosures. GEO has presented herein certain forward-looking statements about GEO’s future financial performance that include non-GAAP financial measures, including Adjusted EBITDAre, Net Operating Income, FFO, Normalized FFO, and AFFO. The determination of the amounts that are included or excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period.

While we have provided a high level reconciliation for the guidance ranges for full year 2021, we are unable to present a more detailed quantitative reconciliation of the forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. The quantitative reconciliation of the forward-looking non-GAAP financial measures will be provided for completed annual and quarterly periods, as applicable, calculated in a consistent manner with the quantitative reconciliation of non-GAAP financial measures previously reported for completed annual and quarterly periods.

Net Operating Income is defined as revenues less operating expenses, excluding depreciation and amortization expense, general and administrative expenses, real estate related operating lease expense, and start-up expenses, pre-tax. Net Operating Income is calculated as net income adjusted by subtracting equity in earnings of affiliates, net of income tax provision, and by adding income tax provision, interest expense, net of interest income, gain/loss on extinguishment of debt, depreciation and amortization expense, general and administrative expenses, real estate related operating lease expense, gain on real estate assets, pre-tax, and start-up expenses, pre-tax.

EBITDAre (EBITDA for real estate) is defined as net income adjusted by adding provisions for income tax, interest expense, net of interest income, depreciation and amortization, and gain on real estate assets, pre-tax. Adjusted EBITDAre (Adjusted EBITDA for real estate) is defined as EBITDAre adjusted for net loss attributable to non-controlling interests, stock-based compensation expenses, pre-tax, and certain other adjustments as defined from time to time, including for the periods presented start-up expenses, pre-tax, one-time employee restructuring expenses, pre-tax, COVID-19 expenses, pre-tax, close-out expenses, pre-tax, and other non-cash revenue and expense, pre-tax.

Given the nature of our business as a real estate owner and operator, we believe that EBITDAre and Adjusted EBITDAre are helpful to investors as measures of our operational performance because they provide an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We believe that by removing the impact of our asset base (primarily depreciation and amortization) and excluding certain non-cash charges, amounts spent on interest and taxes, and certain other charges that are highly variable from year to year, EBITDAre and Adjusted EBITDAre provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates and operating costs, providing a perspective not immediately apparent from net income attributable to GEO. The adjustments we make to derive the non-GAAP measures of EBITDAre and Adjusted EBITDAre exclude items which may cause short-term fluctuations in income from continuing operations and which we do not consider to be the fundamental attributes or primary drivers of our business plan and they do not affect our overall long-term operating performance. EBITDAre and Adjusted EBITDAre provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes.

Funds From Operations, or FFO, is defined in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income/loss attributable to common shareholders (computed in accordance with United States Generally Accepted Accounting Principles), excluding real estate related depreciation and amortization, excluding gains and losses from the cumulative effects of accounting changes, extraordinary items and sales of properties, and including adjustments for unconsolidated partnerships and joint ventures.

Normalized Funds from Operations, or Normalized FFO, is defined as FFO adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure GEO’s actual operating performance, including for the periods presented gain on the extinguishment of debt, pre-tax, start-up expenses, pre-tax, one-time employee restructuring expenses, pre-tax, COVID-19 expenses, pre-tax, close-out expenses, pre-tax, and tax effect of adjustments to FFO. Adjusted Funds From Operations, or AFFO, is defined as Normalized FFO adjusted by adding non-cash expenses such as non-real estate related depreciation and amortization, stock based compensation expense, the amortization of debt issuance costs, discount and/or premium and other non-cash interest, and by subtracting recurring consolidated maintenance capital expenditures and other non-cash revenue and expenses.

Adjusted Net Income is defined as Net Income Attributable to GEO adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure GEO’s actual operating performance, including for the periods presented gain/loss on real estate assets, pre-tax, gain on the extinguishment of debt, pre-tax, start-up expenses, pre-tax, one-time employee restructuring expenses, pre-tax, COVID-19 expenses, pre-tax, close-out expenses, pre-tax, and tax effect of adjustments to Net Income Attributable to GEO.

Because of the unique design, structure and use of our GEO Secure Services and GEO Care facilities, we believe that assessing the performance of our secure facilities, processing centers, and reentry centers without the impact of depreciation or amortization is useful and meaningful to investors. Although NAREIT has published its definition of FFO, companies often modify this definition as they seek to provide financial measures that meaningfully reflect their distinctive operations. We have modified FFO to derive Normalized FFO and AFFO that meaningfully reflect our operations. Our assessment of our operations is focused on long-term sustainability. The adjustments we make to derive the non-GAAP measures of Normalized FFO and AFFO exclude items which may cause short-term fluctuations in net income attributable to GEO but have no impact on our cash flows, or we do not consider them to be fundamental attributes or the primary drivers of our business plan and they do not affect our overall long-term operating performance. We may make adjustments to FFO from time to time for certain other income and expenses that do not reflect a necessary component of our operational performance on the basis discussed above, even though such items may require cash settlement.

Because FFO, Normalized FFO and AFFO exclude depreciation and amortization unique to real estate as well as non-operational items and certain other charges that are highly variable from year to year, they provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates, operating costs and interest costs, providing a perspective not immediately apparent from Net Income Attributable to GEO. We believe the presentation of FFO, Normalized FFO and AFFO provide useful information to investors as they provide an indication of our ability to fund capital expenditures and expand our business. FFO, Normalized FFO and AFFO provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes. Additionally, FFO, Normalized FFO and AFFO are widely recognized measures in our industry as a real estate investment trust.

Safe-Harbor Statement

This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results, including statements regarding GEO’s financial guidance for the full-year, third quarter, and fourth quarter of 2021. Risks and uncertainties that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to meet its financial guidance for 2021 given the various risks to which its business is exposed; (2) GEO’s ability to deleverage and repay, refinance or otherwise address its debt maturities in an amount or on the timeline it expects, or at all; (3) changes in federal and state government policy, orders, directives, legislation and regulations that affect public-private partnerships with respect to secure, correctional and detention facilities, processing centers and reentry centers, including the timing and scope of implementation of President Biden’s Executive Order directing the U.S. Attorney General not to renew the U.S. Department of Justice contracts with privately operated criminal detention facilities; (4) changes in federal immigration policy; (5) public and political opposition to the use of public-private partnerships with respect to secure correctional and detention facilities, processing centers and reentry centers; (6) the magnitude, severity, and duration of the current COVID-19 global pandemic, its impact on GEO, GEO’s ability to mitigate the risks associated with COVID-19, and the efficacy and distribution of COVID-19 vaccines; (7) GEO’s ability to sustain or improve company-wide occupancy rates at its facilities in light of the COVID-19 global pandemic and policy and contract announcements impacting GEO’s federal facilities in the United States; (8) fluctuations in our operating results, including as a result of contract terminations, contract renegotiations, changes in occupancy levels and increases in our operating costs; (9) general economic and market conditions, including changes to governmental budgets and its impact on new contract terms, contract renewals, renegotiations, per diem rates, fixed payment provisions, and occupancy levels; (10) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (11) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (12) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (13) GEO’s ability to successfully pursue growth and continue to create shareholder value; (14) GEO’s ability to obtain financing or access the capital markets in the future on acceptable terms or at all; (15) other factors contained in GEO’s Securities and Exchange Commission periodic filings, including its Form 10-K, 10-Q and 8-K reports.

Second quarter and first six months of 2021 financial tables to follow:

Condensed Consolidated Balance Sheets*

(Unaudited)

			As of			As of
			June 30, 2021			December 31, 2020
			(unaudited)			(unaudited)
ASSETS
Cash and cash equivalents		$	483,048		$	283,524
Restricted cash and cash equivalents			29,892			26,740
Accounts receivable, less allowance for doubtful accounts			313,831			362,668
Contract receivable, current portion			6,420			6,283
Prepaid expenses and other current assets			35,449			32,108
Total current assets		$	868,640		$	711,323
Restricted Cash and Investments			45,465			37,338
Property and Equipment, Net			2,074,350			2,122,195
Contract Receivable			382,829			396,647
Operating Lease Right-of-Use Assets, Net			120,208			124,727
Assets Held for Sale			28,197			9,108
Deferred Income Tax Assets			36,604			36,604
Intangible Assets, Net (including goodwill)			932,753			942,997
Other Non-Current Assets			74,563			79,187
Total Assets		$	4,563,609		$	4,460,126
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	75,329		$	85,861
Accrued payroll and related taxes			65,298			67,797
Accrued expenses and other current liabilities			189,770			202,378
Operating lease liabilities, current portion			28,095			29,080
Current portion of finance lease obligations, long-term debt, and non-recourse debt			27,240			26,180
Total current liabilities		$	385,732		$	411,296
Deferred Income Tax Liabilities			30,726			30,726
Other Non-Current Liabilities			117,273			115,555
Operating Lease Liabilities			98,474			101,375
Finance Lease Liabilities			2,614			2,988
Long-Term Debt			2,632,332			2,561,881
Non-Recourse Debt			311,390			324,223
Total Shareholders’ Equity			985,068			912,082
Total Liabilities and Shareholders’ Equity		$	4,563,609		$	4,460,126
* all figures in ‘000s

Condensed Consolidated Statements of Operations*

(Unaudited)

			Q2 2021			Q2 2020			YTD 2021			YTD 2020
			(unaudited)			(unaudited)			(unaudited)			(unaudited)
	Revenues	$	565,419		$	587,829		$	1,141,796		$	1,192,846
	Operating expenses		405,009			444,035			833,160			905,781
	Depreciation and amortization		33,306			33,434			67,423			66,761
	General and administrative expenses		54,688			45,543			103,167			99,325
Operating income			72,416			64,817			138,046			120,979
	Interest income		5,985			5,248			12,187			10,686
	Interest expense		(32,053)			(30,610)			(63,897)			(64,790)
	Gain on extinguishment of debt		1,654			–			4,693			1,563
	Gain/(Loss) on dispositions of real estate		(2,950)			(1,304)			10,379			(880)
Income before income taxes and equity in earnings of affiliates			45,052			38,151			101,408			67,558
	Provision for income taxes		5,063			4,196			12,999			10,742
	Equity in earnings of affiliates, net of income tax provision		1,942			2,699			4,007			4,959
Net income			41,931			36,654			92,416			61,775
	Less: Net loss attributable to noncontrolling interests		28			66			88			126
Net income attributable to The GEO Group, Inc.		$	41,959		$	36,720		$	92,504		$	61,901
Weighted Average Common Shares Outstanding:
	Basic		120,426			119,810			120,225			119,602
	Diluted		120,470			119,964			120,431			119,937
Net income per Common Share Attributable to The GEO Group, Inc. **:
	Basic:
	Net income per share — basic	$	0.29		$	0.31		$	0.71		$	0.52
	Diluted:
	Net income per share — diluted	$	0.29		$	0.31		$	0.70		$	0.52
Regular Dividends Declared per Common Share		$	–		$	0.48		$	0.25		$	0.96
	* All figures in ‘000s, except per share data
	** Diluted earnings per share attributable to GEO available to common stockholders was calculated and presented in GEO’s unaudited financial statements under the two-class method for the
	six months ended June 30, 2021 due to the issuance of GEO’s 6.50% exchangeable senior notes due 2026 as the exchangeable senior notes are considered to be participating securities.

Reconciliation of Net Income Attributable to GEO to Adjusted Net Income

(In thousands, except per share data)(Unaudited)

			Q2 2021				Q2 2020				YTD 2021				YTD 2020
Net Income attributable to GEO			$	41,959			$	36,720			$	92,504			$	61,901
Add:
(Gain)/Loss on real estate assets, pre-tax				2,950				1,304				(10,379	)			880
Gain on extinguishment of debt, pre-tax				(1,654	)			–				(4,693	)			(1,563	)
Start-up expenses, pre-tax				–				553				–				2,506
One-time employee restructuring expenses, pre-tax				7,459				–				7,459				–
COVID-19 expenses, pre-tax				–				3,877				–				4,769
Close-out expenses, pre-tax				–				2,284				–				4,220
Tax effect of adjustments to Net Income attributable to GEO				105				(1,599	)			13				(762	)
Adjusted Net Income			$	50,819			$	43,139			$	84,904			$	71,951
Weighted average common shares outstanding – Diluted				120,470				119,964				120,431				119,937
Adjusted Net Income Per Diluted Share *			$	0.42			$	0.36			$	0.71			$	0.60

* In accordance with GAAP, diluted earnings per share attributable to GEO available to common stockholders is calculated under the if-converted method or the two-class method, whichever calculation results in the lowest diluted earnings per share amount, which may be lower than Adjusted Net Income Per Diluted Share.

Reconciliation of Net Income Attributable to GEO to FFO, Normalized FFO, and AFFO*

(Unaudited)

				Q2 2021			Q2 2020			YTD 2021			YTD 2020
				(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net Income attributable to GEO			$	41,959		$	36,720		$	92,504		$	61,901
	Add (Subtract):
		Real Estate Related Depreciation and Amortization		18,846			18,384			37,818			36,780
		(Gain)/Loss on real estate assets, pre-tax		2,950			1,304			(10,379)			880
Equals: NAREIT defined FFO			$	63,755		$	56,408		$	119,943		$	99,561
	Add (Subtract):
		Gain on extinguishment of debt, pre-tax		(1,654)			–			(4,693)			(1,563)
		Start-up expenses, pre-tax		–			553			–			2,506
		One-time employee restructuring expenses, pre-tax		7,459			–			7,459			–
		COVID-19 expenses, pre-tax		–			3,877			–			4,769
		Close-out expenses, pre-tax		–			2,284			–			4,220
		Tax effect of adjustments to funds from operations **		105			(1,599)			13			(762)
Equals: FFO, normalized			$	69,665		$	61,523		$	122,722		$	108,731
	Add (Subtract):
		Non-Real Estate Related Depreciation & Amortization		14,460			15,050			29,605			29,981
		Consolidated Maintenance Capital Expenditures		(4,572)			(4,139)			(8,511)			(11,166)
		Stock Based Compensation Expenses		4,023			4,706			11,426			14,474
		Other non-cash revenue & expenses		(1,102)			–			(2,204)			–
		Amortization of debt issuance costs, discount and/or premium and other non-cash interest		1,903			1,708			3,586			3,378
Equals: AFFO			$	84,377		$	78,848		$	156,624		$	145,398
Weighted average common shares outstanding – Diluted				120,470			119,964			120,431			119,937
FFO/AFFO per Share – Diluted
	Normalized FFO Per Diluted Share		$	0.58		$	0.51		$	1.02		$	0.91
	AFFO Per Diluted Share		$	0.70		$	0.66		$	1.30		$	1.21
	Regular Common Stock Dividends per common share		$	–		$	0.48		$	0.25		$	0.96
	* all figures in ‘000s, except per share data
	** tax adjustments related to gain/loss on real estate assets, Gain on extinguishment of debt, Start-up expenses, One-time employee restructuring expenses, COVID-19 expenses, and Close-out expenses.

Reconciliation of Net Income Attributable to GEO to Net Operating Income, EBITDAre and Adjusted EBITDAre*

(Unaudited)

				Q2 2021			Q2 2020			YTD 2021			YTD 2020
				(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net Income attributable to GEO			$	41,959		$	36,720		$	92,504		$	61,901
	Less
		Net loss attributable to noncontrolling interests		28			66			88			126
Net Income			$	41,931		$	36,654		$	92,416		$	61,775
	Add (Subtract):
		Equity in earnings of affiliates, net of income tax provision		(1,942)			(2,699)			(4,007)			(4,959)
		Income tax provision		5,063			4,196			12,999			10,742
		Interest expense, net of interest income		26,068			25,362			51,710			54,104
		Gain on extinguishment of debt		(1,654)			–			(4,693)			(1,563)
		Depreciation and amortization		33,306			33,434			67,423			66,761
		General and administrative expenses		54,688			45,543			103,167			99,325
Net Operating Income, net of operating lease obligations			$	157,460		$	142,490		$	319,015		$	286,185
	Add:
		Operating lease expense, real estate		4,240			4,792			8,325			9,744
		(Gain)/Loss on real estate assets, pre-tax		2,950			1,304			(10,379)			880
		Start-up expenses, pre-tax		–			553			–			2,506
Net Operating Income (NOI)			$	164,650		$	149,139		$	316,961		$	299,315
				Q2 2021			Q2 2020			YTD 2021			YTD 2020
				(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net Income			$	41,931		$	36,654		$	92,416		$	61,775
	Add (Subtract):
		Income tax provision **		5,354			4,681			13,630			11,670
		Interest expense, net of interest income ***		24,414			25,362			47,017			52,541
		Depreciation and amortization		33,306			33,434			67,423			66,761
		(Gain)/Loss on real estate assets, pre-tax		2,950			1,304			(10,379)			880
EBITDAre			$	107,955		$	101,435		$	210,107		$	193,627
	Add (Subtract):
		Net loss attributable to noncontrolling interests		28			66			88			126
		Stock based compensation expenses, pre-tax		4,023			4,706			11,426			14,474
		Start-up expenses, pre-tax		–			553			–			2,506
		One-time employee restructuring expenses, pre-tax		7,459			–			7,459			–
		COVID-19 expenses, pre-tax		–			3,877			–			4,769
		Close-out expenses, pre-tax		–			2,284			–			4,220
		Other non-cash revenue & expenses, pre-tax		(1,102)			–			(2,204)			–
Adjusted EBITDAre			$	118,363		$	112,921		$	226,876		$	219,722
	* all figures in ‘000s
	** including income tax provision on equity in earnings of affiliates
	*** includes (gain)/loss on extinguishment of debt

2021 Outlook/Reconciliation

(In thousands, except per share data)

(Unaudited)

		FY 2021
Net Income Attributable to GEO		$	167,500		to	$	174,500
Real Estate Related Depreciation and Amortization			76,000				76,000
Gain/Loss on Real Estate			(10,000	)			(10,000	)
Funds from Operations (FFO)		$	233,500		to	$	240,500
(Gain)/Loss on Extinguishment of Debt			(5,000	)			(5,000	)
Non-recurring Expenses			10,000				10,000
Normalized Funds from Operations		$	238,500		to	$	245,500
Non-Real Estate Related Depreciation and Amortization			60,000				60,000
Consolidated Maintenance Capex			(17,000	)			(17,000	)
Non-Cash Stock Based Compensation			19,000				19,000
Non-Cash Interest Expense			7,500				7,500
Other Non-Cash Revenue & Expenses			(4,000	)			(4,000	)
Adjusted Funds From Operations (AFFO)		$	304,000		to	$	311,000
Net Interest Expense			103,000				103,000
Non-Cash Interest Expense			(7,500	)			(7,500	)
Consolidated Maintenance Capex			17,000				17,000
Income Taxes (including income tax provision on equity in earnings of affiliates)			25,000				25,000
Adjusted EBITDAre		$	441,500		to	$	448,500
G&A Expenses			193,000				193,000
Non-recurring Expenses			(10,000	)			(10,000	)
Non-Cash Stock Based Compensation			(19,000	)			(19,000	)
Equity in Earnings of Affiliates			(8,000	)			(8,000	)
Real Estate Related Operating Lease Expense			19,000				19,000
Net Operating Income		$	616,500		to	$	623,500
Adjusted Net Income Per Diluted Share *		$	1.34			$	1.40
AFFO Per Diluted Share		$	2.51		to	$	2.57
Weighted Average Common Shares Outstanding-Diluted			121,000		to		121,000

* In accordance with GAAP, diluted earnings per share attributable to GEO available to common stockholders is calculated under the if-converted method or the two-class method, whichever calculation results in the lowest diluted earnings per share amount, which may be lower than Adjusted Net Income Per Diluted Share.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005317/en/

Pablo E. Paez, (866) 301 4436

Executive Vice President, Corporate Relations

KEYWORDS: United States North America Florida

INDUSTRY KEYWORDS: Technology Construction & Property REIT Security

MEDIA:

Posted on August 4, 2021 6:56 am

GFL Environmental Inc. Prices Upsized Private Offering of Senior Notes

PR Newswire

VAUGHAN, ON, Aug. 4, 2021 /PRNewswire/ – GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) (“GFL”) today announced the pricing of US$550.0 million in aggregate principal amount of 4.375% senior notes due 2029 (the “Notes”) in a transaction that was significantly oversubscribed. The offering was upsized by US$150.0 million over the previously announced offering size of US$400.0 million. GFL intends to use the net proceeds from the offering of the Notes (the “Notes Offering”) for general corporate purposes, including acquisitions.

The Notes being offered by GFL in the Notes Offering have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Notes are being offered only to qualified institutional buyers under Rule 144A and outside the United States in compliance with Regulation S under the Securities Act. In Canada, the Notes are to be offered and sold on a private placement basis in certain provinces of Canada.

This release shall not constitute an offer to sell or a solicitation of an offer to buy any security, nor shall there be any offer, solicitation or sale of any security in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful.

About GFL

GFL, headquartered in Vaughan, Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of non-hazardous solid waste management, infrastructure & soil remediation and liquid waste management services through its platform of facilities throughout Canada and in 27 states in the United States. Across its organization, GFL has a workforce of more than 15,000 employees.

Forward-Looking Information

This release includes certain “forward-looking statements”, including statements relating to the potential for an offering and issuance of the Notes by GFL and the use of proceeds therefrom. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by GFL as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the “Risk Factors” section of GFL’s annual report for the 2020 fiscal year filed on Form 20-F and GFL’s other periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. These factors are not intended to represent a complete list of the factors that could affect GFL. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. GFL undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.

For more information:

Patrick Dovigi +1 905-326-0101 [email protected]